University of Missouri Extension livestock economist Dr. Ron Plain says U.S. pork producers have now lost more money than they lost in the pork price disaster of 1998-99. Speaking at the annual Swine Institute in Columbia, Mo., Plain said that during the past 24 months the average hog was marketed at a loss of $19.18 per head. In fact he said, farmers have lost money raising hogs in 23 of the last 25 months. The problems are moderately low market prices but record-high production costs.
Farmers have sent sows to slaughter; however, they have kept more replacement gilts, defeating the potential cut in pork. Plain predicted the hog-farm price squeeze is likely to get worse before it gets better. He went on to warn that bankers will begin forcing the issue. Under their financial rules, bankers don't have much wiggle room and will not be renewing many hog loans
"Farmers are a victim of their own efficiencies," Plain said. "The dilemma of too many pigs and not enough buyers will be solved only one way - farmers must cut production 15% from the peak for prices to return to break-even."